The musings of a bearded earthling

Category Archives: Capitalism

I wrote a few days ago about rural cycling and micromobility and since then I’ve spent a bit of time reading and listening on the larger concept. Much of what I’ve come across thus far is focused on micromobility in the urban setting because that’s where it is most useful and where so many humans live.

Also, worth noting perhaps, is that my current primary source on the topic is Micromobility.io, the website and the podcast by Horace Dediu and Oliver Bruce. After perusing the site and listening to several podcast episodes this seems like an excellent resource on the topic though it does largely come from an interest in the business potential of micromobility which would be last on my list. His specific interest seems to be centered on the prospects of providing micromobility devices such as scooters and e-bikes as a ride-share platform such as Lime. I understand why Dediu takes the approach he does and it’s informative and very helpful and in a global economy with rampant capitalism it obviously has a place.

That said, I think coming at this from primarily a business interest sets it up with certain bias. In episode 41 of the podcast he specifically states at one point that he’s really only interested in micromobility devices as a service platform when he and co-host Oliver Bruce are discussing ownership as a utility product vs a rental services platform. At about 26:24 he states that “if the market is only utility I’m going to be out of it in a couple of years. Forget it. I’m done.” It’s possible I misunderstood that bit of the conversation but if correct I feel as though he’s going to be biased in his approach of the larger picture of the technology.

But really, I’m out of my depth in that I’m just a passerby who has stopped for a sip of water. Perhaps his is the best approach, a focus on micromobility as services built on apps with easy access is best. It certainly has a place in how people access the devices. But I tend to come at things from a concern for the planet and overall health. And certainly these concerns are addressed on both the podcast and the site, for example this post regarding micromobility and climate change.

In general I’m not a fan of capitalism and the idea that capitalism can or should or will be the primary force in solving the social ecological problems it has caused seems off. Surely it has a role to play and I’m not going to say that specific companies and services can’t have a positive role to play. It’s complicated. Our social and ecological problems are complicated. If there are companies that can make a profit via micromobility device sharing services which help address the problem of climate change then that’s certainly positive. But I see no reason to rule out an approach that allows for other forms of distribution and development of such devices.

Which brings me to another point. Along with the focus on micromobility as a service I’m also seeing a focus on urban environments. Again, maybe that makes sense from certain perspectives. But in doing just a bit of preliminary searching for rural micromobility I came across the Shared-Use mobility Center and in particular this article on Rural and Small Town Transportation:

According to the U.S. Census Bureau, a rural area is any area that is neither an urbanized area (50,000 or more people) nor an urban cluster (between 2,500 to 50,000 people). Currently, over 60 million (1 in 5) Americans live in such areas. Similarly, the term “small town” has a wide array of connotations, encompassing communities ranging from tiny village to sprawling suburb.

And so, I return to the topic of rural and even small town micromobility. I’ve just begun to scratch the surface of the content published by Dediu and others but what is to be done outside of cities? It may only be 20% in the US but certainly a solution is still needed. I’ve only really pondered my own small town and rural setting which, like many in the U.S. is relatively poor. Certainly many who are in this small town could be served fairly well by e-bikes. I’d guess that many in small towns smaller and larger than this might also find great utility in having access to one or two Ebikes equipped for shopping or other utilitarian purposes.

And as I’ve pointed out in numerous recent posts documenting my current use of an e-bike for riding to town there is also potential for some rural residents to make use of such assistive devices. My six to eight mile ride to town allows for me to do most of the things I need to do when I go to town. I don’t know what the numbers are for rural residents living in a similar radius but certainly small towns and their associated 5 to 8 mile radius of residents is worth including in the discussion of micromobility even if such areas are not prime profit markets?

As the the article on Micromobility and climate change states,, most of trips are short and that’s where most emissions are. I’d guess that the numbers vary when one get’s into the specific settings such as urban, suburban and rural ares but perhaps not by much. In any case, the problem of poverty and carbon emissions exist in rural and small town areas as well as urban and I’d suggest that while it won’t be the only solution certainly micromobility has a role to play here.

I’m probably a bit sloppy in my thinking here. Or, perhaps more accurate, I’m showing my newness to an area of analysis that’s been pretty well developed in a very specific direction. I’m looking forward to learning more from Horace Dediu and Oliver Bruce as well as the others writing and being interviewed. I’ll also be looking at the thoughts of others coming at it from other, less profit-driven perspectives.

Life is once again headed for total collapse. While coverage of last week’s major Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)reporton biodiversity loss rightly played up the dire numbers — an estimated 1 million species gone by 2050 — what’s truly remarkable are the solutions the authors offer in response. Ditching the timid pragmatism of technocrats, these scientists are calling for nothing less than the total transformation of the global economy. Producing for profit has failed us, they say, and failed the planet. We need a new system.

Only “transformative change” can stop massive species loss, according to the report’s conclusion. That means overhauling the global economy to prioritize human well-being and environmental sustainability rather than the pursuit of profit. “We’re not addressing the underlying causes of biodiversity loss, which is the way we organize economies, production and consumption patterns, our institutions, and our rules,” says Ingrid Visseren-Hamakers, associate professor of environmental science and policy at George Mason University and a coordinating lead author of the IPBES report. “We need to transform the sheer fabric of our society to become more sustainable.”

Today’s great dying is happening faster than ever before, and its causes are clear: breakneck development, fossil-fueled global warming, industrial pollution, single-crop agriculture. Complex as these processes are, they point to a common culprit: Agrowth-based economic systembent on wringing cash from nature has exploited the planet’s ecosystems beyond what they can bear. Now, Earth’s fragile life-support system is entering a death spiral that threatens human existence and which no one is prepared to stop.

Over the past couple years Automatic Earth has become one of my favorite economic blogs and Ilgari’s Christmas Eve post is a good example of why I venture there daily. Ilgari makes the point that the past year’s economic developments were, essentially, about the transfer of private debt to the public. This picture just gets worse and worse:

Many people today feel happy and positive when they look at the stock markets, because they think these reflect the real economy, and since the markets are up, things must have changed for the better in the past year.

But they haven’t, not below the surface. It’s all veneer and no substance. What actually has happened is that -virtually- no debt has been paid off in our economies, in fact we’ve added trillions of dollars more in debt. What is different from a year ago is that a huge part of the old debt and all of the new debt has been transferred to the public, and away from private business, in particular financial institutions (and, to an extent, carmakers).

So it comes down to the fact that people feel happy for being deeper in debt, and quite a bit deeper. Being the humans we are, we focus on the short term gratification which can be found in the Dow and a whole slew of increasingly fabricated numbers and government reports, while we conveniently ignore the enormous increases in debts, both public and private, that we will have to pay off down the line.

But, you say, it’s not as bad as it may look, because when the crisis is over, we will return to growth, and that will take care of the debt. That and shrewd dollar-inflation strategies by the wizards at the Fed and Treasury.

Really? What if the crisis lasts, let’s say, ten years? All that needs to happen for that is for home prices to keep falling, or even stagnate. And that seems a near certainty.

The US has no private mortgage market left, or even a viable housing market. Neither do Canada, Britain, Holland and many other countries for that matter. Homes are sold and mortgages approved only because the state takes them off the lenders’ hands and books the minute the deals are closed. The loans are then securitized and sold on to, in America’s instance, the central bank. In other words, all of the risk for all of the entire loans processed in this fashion lies squarely with the taxpayer.

And that is not a good thing if prices keep dropping. When unemployment won’t come down. When governments start raising taxes because sovereign debt goes through the various rooftops.

The main problem’s not even paying off the principal of the debt. That won’t start happening for years to come, if ever. It’s paying the interest on the debt that will become the most immediate headache.

It’s been awhile since I pointed folks to any of my favorite blogs and when I came across this quote over at the Automatic Earth I thought I’d remedy that. First, from this post at the above mentioned site:

Joe Bageant has something to add to that picture:

Speaking of motives, there are those who worry about an American authoritarian police state one day rounding folks up, shuffling them off to geographically remote camps, such as the Department of Homeland Security’s scattered FEMA Camps. But physical geography isn’t the only geography. There is geography of the mind too, where another kind of hellish internment may be conducted.

One without razor wire or sirens but surely as confining and in its own way, as soul chilling as any concentration camp. One with plenty to eat and filled with distractions and diversions enough to drown out the alarms and sirens that go off inside free men at the scent of tyranny. If a round up of Americans is real, then it began years ago. And as far as I can tell, everyone went peacefully, each one alone, like children, whose greatest concern on that day when the gates were closed, was the absence of Ranch flavored Pringles.

As someone who has spent most of the past 18 years outside of the american mainstream I can say that Bageant nailed that perfectly. Chomsky called it the manufacturing of consent in his analysis of the media which has served over the past 60 years or so as the primary tool used to control the public. In any case, do check the Automatic Earth for a fantastic daily post which offers what I think is the best take on the current economic collapse. The format of each post usually consists of a page of introductory thoughts based on a huge buffet of stories which follow. I never have the time to read those so I read the intro and skim the headlines below and then skim the comments.

Oh yes, I know that the stock market had an orgie of a day yesterday on the news of the schemes being cooked up by the Obama administration to deal with the toxic assets currently in the financial system. More of the same and it won’t work because it is a refusal to deal with reality. The whole reaction to this massive mess of fraud is more fraud. The spectacle is truly disgusting.

The only thing surprising about the crisis—I should say the crises—now deepening around us, is that it has taken so many of us by surprise. For several years before the subprime mess started the current hemorrhage in global finance, I read detailed predictions for how the subprime mortgage bubble would burst, with the shattering and cascading effects in the wider system that we have now seen—analyses, mind you, not of Ivy League economic think-tankers, but of reflective folks of ordinary common sense like you and me. If such people were able to read the writing on the wall, where were the deciders in government and Wall Street, the head of the Federal Reserve? What were they thinking?

But this crisis has been long in the making, and the biggest mistake would be to assume that an anonymous “they” out there—Wall Street moguls, hypesters for junk-level, credit-for-everybody mortgages, OPEC gougers—are the ones who have brought us to grief, through no fault of our own. We are supposedly adults in a functioning democracy, not children, and as such we cannot escape responsibility for our willful complicity in an economy that defies compatibility with natural systems, meaning natural limits, and which opts consistently for short-term gain in preference to long-term soundness and sustainability.

I remember reading on the first page of the first economics textbook I ever encountered (Economics, by Paul Samuelson, when I was in graduate school) that the foundation of our economy is: perpetual growth. Not the natural resource base. Not equitable distribution of wealth. Not sustainability. The author was emphatic and unambiguous: Without constant, vigorous expansion, our economy would stagnate and fall apart. And on that first page, even a bonehead neophyte ignoramus like me was saying in confused surprise, “But that’s impossible—nothing can grow without limits!” (Except cancer, whose perpetual growth is precisely what in the end kills its host.)

In the broad blogging margins of the web that orbit the mainstream media like the rings of Saturn, an awful lot of reasonable people have begun to ask whether President Obama is a stooge of whatever remains of Wall Street, with Citigroup and Goldman Sachs’s puppeteer, Robert Rubin, pulling strings behind an arras in the Oval Office. Personally, I doubt it, but it is still a little hard to understand what the President is up to. For one thing, the stimulus package, so-called, looks more and more like national sub-prime mortgage itself, a bad bargain made under less-than-realistic terms, with future obligations fobbed onto whoever inhabits this corner of the world for the next seven hundred years — and all to pay for a bunch of granite counter-tops and flat-screen TVs.

We’ve heard it over and over and over and over from those in power in reference to this coming depression: “We have to do something.” My thought? No, no actually you don’t HAVE to do something especially when doing something is the wrong thing to do. Action for the sake of action is stupidity. But they are not just doing something. They are doing the same thing that got us into this situation. Taking on more debt to fix debt for the sake of growth that is not even real growth. Well, the consumption was real and the growth for China was real, but the debt taken on in the U.S. was just that, debt. We got in the habit of telling ourselves, as a nation, that credit and debt were wealth but they are not even close to wealth. They may create the illusion of wealth but when it comes time to pay back what you don’t have the reality comes home.

There will be no getting out of this mess, no way to navigate around it. The hard truth is that we will have to slog through it day by day. This collapse was a very long time in coming and the going will be an equally long time. Unlike the first Great Depression though, when we begin to come out of this we will not find a ready, seemingly limitless supply of oil to tap into. We’ll discover that the production peaked sometime between 2005-2007. The good news though is that by that time we will have gotten used to a scaled back, lower income, lower energy way of life.

Again, to quote Kunstler:

Among the questions that disturb the sleep of many casual observers is how come Mr. O doesn’t get that the conventional process of economic growth — based, as it was, on industrial expansion via revolving credit in a cheap-energy-resource era — is over, and why does he keep invoking it at the podium? Dear Mr. President, you are presiding over an epochal contraction, not a pause in the growth epic. Your assignment is to manage that contraction in a way that does not lead to world war, civil disorder or both. Among other things, contraction means that all the activities of everyday life need to be downscaled including standards of living, ranges of commerce, and levels of governance. “Consumerism” is dead. Revolving credit is dead — at least at the scale that became normal the last thirty years. The wealth of several future generations has already been spent and there is no equity left there to re-finance.

I thought I’d direct folks to this fantastic post at The Automatic Earth regarding the costs of homes in relation to personal income and the role of banks in removing wealth from our communities. Some interesting points there about the end of a functioning capitalist system as well as a sensible, community-based approach to dealing with foreclosures. The only thing I’ll add is that we have been far too focused on wishful thinking in this country and that has to end. The longer we try to hold back reality, the more energy we spend trying to go around this mess rather than through it, the more intense and longer lasting it will be.

Why is 3 times income a reasonable price for a home? Shouldn’t the prices perhaps be exclusively set by the cost of building a home? If 3 times income were “normal”, consider that prices have become easily 3 times the cost of building the home. So most homes cost 1 time annual income to build. And that’s just the start. A mortgage of the elevated value will cost 3-4 times its notional value to be paid off in full. Thus instead of living in a home paid off at 1 time annual income, buyers will need 10-12 times annual income to own a home free and clear. All this is money that disappears from communities, and into the vaults of big faceless banks. It’s little wonder that communities and individuals have an ever harder time establishing a decent level of services and decent living standards, health care, education, water treatment etc.

Why do we accept so easily that speculation is a good thing when it comes to our basic needs? It will come back to haunt us in a very aggressive way. Now that the speculators, banks and developers can no longer rely on housing for their gambling incomes, they will turn to other basic necessities, none of which are shielded from the so-called free market. Thus, as incomes drop and deflation expands its rule over the earth, prices for food, water and energy will be set by “free” markets.

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If we would stop handing money to the banks, which are insolvent anyway, take the troubled mortgages they hold or have sold to Fannie and Freddie, who would also receive not one additional penny, and give them to the communities, who can negotiate with the occupants about a reasonable rent that would allow them to remain on the premises (perhaps the Obama 31%-38% of income?!), providing the communities with income, we do away with the need for all these bail-outs. In one fell swoop.

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A situation such as the one I’m painting here will eventually and inevitably come to fruition. But our political and societal structures will not let it, not voluntarily. And that will unnecessarily raise the suffering to levels we do not even dare to fear. Free market capitalism is dead, and I don’t say that because I have communist sympathies. I just look around me and see that no society can exist that allows too many of its citizens to fall into utter misery. What killed our capitalist system is the inclusion of basic human needs in an economic system based on speculative games. If you set up an economy that propagates gambling with basic human necessities, you will of necessity end up gambling away the lives of the people who depend for their survival on those necessities. Our societies have played these games beyond our borders, in Africa and Asia, for hundreds of years. And now, because the system dies of it cannot grow, it’s our turn.

The fact of the matter, of course, is that the $275 billion will not, and are not meant to, benefit the homeowners. They are provided for the benefit of the lenders, the banks. They are meant to guarantee an ongoing flow of funds towards the vaults replete with toxic debts based on the very homes the government now showers with cash. They are meant to artificially continue to prop up US real estate values, which, if they were allowed to simply follow the course of the markets, would bankrupt not only the owners, for which Washington cares preciously little, but also the banks, for which Washington will bend over backwards any time of day. The main problem is that it’s way too late. The banks will drown, and everybody knows it. So the only real purpose served by these measures is to transfer ever more of the public’s funds to the banking sector. It’ll go on until the nation itself is completely broke and broken.

Obama’s chief of staff is a former Freddie Mac board member and fervent supporter of the invasion of Iraq. Many of the ‘experts’ are, or have been, Goldman and Citigroup execs. These people like the power and the money they have gathered while driving the economy into the ground. They’re not going to give that up just to build a financial system that would better serve the people. They’ll build one that best serves them.

Sure, some loose ends will be tweaked, but mostly they’ll spend the nation into a depression by attempting to salvage corporations that would have long since died if it were not for America’s 21st century version of Mussolini’s corporate fascism, and the unlimited access to the public trough it provides.

The broke man in the street will be broker, until he’s broken, until he lives in the street, his last hard earned penny squeezed from his hands and dumped into banks, insurers and carmakers that have zero chance of ever turning a profit again.

The taxpayer will be taxed, and will be forced to pay until (s)he can pay no more, if need be at the barrel of a gun, until (s)he no longer has a job, a home, dignity or a future. And then the growth machine will spit her out. Whoever can’t produce or consume is a write-off.

We’ve spent too much, and now we’re broke. Let’s spend more, and lots more, ‘cause then we will be whole again. Double or nothing, it’s all we know.

What is reducing the amount of productive work accomplished, and moving the money increasingly only into a few pockets? It is the high price of food. And what is the root cause of the high price of food? Well, the single biggest factor, according to a number of studies, including the UN studies, has been the move to food based biofuels. So if we peel back the onion one more layer, what we find is that one of the major factors slowing the economy has been, well, oil. The rush to biofuels is a response to tightening oil supplies and rising costs, and the aggregate effect has been to push up food prices all over the world, while doing pretty much nothing to increase energy security, reduce greenhouse gasses or do much of anything else useful.

I’m no economist, and I don’t pretend to be. But I wonder, when we peel back the layers of the onion later, and look at the history of this Depression, I wonder if we’ll see that in fact, what happened was that we squeezed out the lifeblood of the very thing we’d built our economy upon – new workers/consumers who could be counted on to grow the economy outwards and upwards. We could have forseen this – but we chose not to – we chose, as we struggled to keep our lifestyle intact on the backs of the world’s poor, not to see that we stand on their backs, and it is people…all the way down. In killing them, we killed ourselves. It may be that besides the tragedy of starving millions of poor people, we may also have brought down our own system, simply because we did not see, did not realize that the poor matter more to us than we like to admit.

Here we must face the hard truth that merely transferring the failed loans from the insolvent banks to an insolvent nation will do nothing but forestall the problem until a slightly later date (when it will be larger and more severe, by the way). The fact that both candidates for president are openly supporting the bailout says that reality has not yet penetrated the inner beltway.

So the first challenge will be recognizing that it really is not possible for an insolvent nation to bail out an insolvent financial system by borrowing more money. This is an absurd notion, and in total it really is no more and no less complicated than that. One cannot solve a crisis rooted in debt by issuing more debt.